I wrote a few posts about the rumours that have been going on – and I got a standardized response from ICICI Bank. I do feel, however, that there is something amiss here. In January, there were reports that ICICI has credit derivative exposures of over $2.2bn, and in March we learned that their Mark to Market losses were in excess of $260mn. We haven’t heard any more information about their final position vis-a-vis their Mark to Market losses. This is strange, given that capital markets have worsened considerably since March. If indeed, ICICI feels that there is nothing to worry about, it should come out and share its current MTM position.

Kamath says that there are ‘zero exposures’ to subprime credit. Does that mean that there is no direct exposure to Mortgage Backed Securities, or does that mean that there are no exposures even to credit derivatives? Does that mean that the $2.2bn dollars of exposure that was announced in Jan has been squared off?

I *do not* think that that depositors need to be worried, and there is absolutely no reason to start withdrawing from your checking account. There is no chance that ICICI Bank will collapse – the regulator wouldn’t allow it. However, that doesn’t mean that the shareholder shouldn’t be cautious, and expect some additional MTM losses.

Read more about my response to ICICI’s standardized statement here: http://www.moneyvidya.com/blog/response-from-icici-bank-to-my-post-fresh-rumours-icici-bank-collapse-imminent/

Gautam Kshatriya
gautam.kshatriya@moneyvidya.com
http://www.moneyvidya.com/blog

Disclaimer: This comment, or anything else on MoneyVidya.com should not be taken as investment advice. This comment and all other comments / articles on MoneyVidya.com/blog are opinions of the authors themselves. I do not hold any positions in ICICI Bank.